Company refused credit due to Covid-19

Affected by Covid-19? Immediate Rescue Or Closure Options Available

FAST Free Director Advice & Support, With 100+ offices Nationwide our Licensed Insolvency Practitioners can Help Today.

Updated: 22nd January 2021

Is your company struggling to obtain funding during COVID-19?

At the height of the first wave of Covid-19, UK businesses suffered extreme disruption and huge financial losses due to the national lockdown and ongoing social distancing interventions.

To combat business closures and save jobs the government brought in various loan schemes and financial assistance, but securing finance and credit hasn’t always been easy for companies/directors and unincorporated businesses.

Companies and individuals at huge financial risk

Sole traders, individual contractors, freelancers and others not protected by the limited liability structure continue to be at risk of personal financial loss. Even company directors are exposed to personal liability under some circumstances.

So when a company or other business is refused credit in this way, it’s a concerning situation given the Chancellor’s intention to provide some financial stability. If you’re struggling to secure the finance you need at this time, there are other finance options available to you that you might not have considered.

Real Business Rescue can help you source alternative funding through innovative, tailored finance solutions and private equity investors.

What type of finance might be available to your business during Covid-19?

Overdrafts and credit cards

Bank overdrafts and business credit cards can be a good temporary option when you’re looking for additional credit on a short-term basis. This type of credit doesn’t provide long-term financial stability, but can be a good source of emergency cash in some instances.

Government backed loans

Government schemes to help businesses affected by the pandemic include the Coronavirus Business Interruption Loan Scheme (CBILS) and the Bounce Back Loan Scheme (BBLS). Government backed loans are available from high street banks and alternative lenders, and both schemes have now been extended for new applicants until 30th November 2020.

Alternative finance

Alternative finance options include asset-based lending that uses the value of your company’s assets to generate working capital. Invoice finance and merchant cash advances are also flexible funding options that might be suitable for your business. The benefits of alternative funding are that it may be easier to access than a traditional bank loan/coronavirus loan, and crucially, can be tailored to your business.

Why are companies being refused credit during Covid-19?

When a lender makes a lending decision it relies partly on a company’s credit rating to measure its risk. If a business has a chequered financial history, possibly involving late or missed payments, this will show up on their credit report and can negatively influence borrowing capacity for some years.

An individual business owner’s credit report holds similar information that lenders use when an application for finance is made, and if there are any defaults they have an equally disruptive effect on the ability to obtain credit/funding.

So what is the answer if you’re in this situation and feel that business survival relies on your ability to access finance? In part, you need to consider funding that doesn’t place a greater burden on your business over the longer term?

Invoice finance

Factoring and invoice discounting are forms of invoice finance that use the value of your sales ledger to provide funding throughout each month. Invoice factoring also offers the added advantage of outsourcing the credit control facility if you’re struggling to collect in your business debts.

Private equity investor

Private equity can be a source of investment capital that keeps your business afloat, providing a stable foundation for growth in the future. Private equity investors can also add value to a company in other ways including specialist knowledge of the sector, or industry contacts.

For more advice on securing credit and finance for your company during Covid-19, please get in touch with our team of experts at Real Business Rescue to arrange a free same-day consultation. We have contacts with alternative financiers around the UK, and operate a network of offices nationwide.

Keith Tully


0800 644 6080
Director Support - Business suffering from Cash-Flow Problems?
If your company is financially distressed, we also offer the below services:
Business debt recovery

  • Recover Unpaid Invoices of £5k+
  • Expert Credit Control Services
  • Stop Late Payers & Bad Debts
Visit Site
Time to pay experts

  • Get Breathing Space with HMRC
  • Support with Business Tax Arrears
  • 35 Years HMRC Negotiation
Visit Site
UK Business Finance

  • Rejected for a CBILS Loan?
  • Get Emergency Business Funding
  • Supporting 1000+ UK Companies
Visit Site
Who we help
  • Company Directors
  • Finance Directors
  • Sole Traders
  • Accountants
  • Small Businesses
  • Large Businesses
  • Partnerships
Contact our team
Jonathan Munnery
Gillian Sayburn
Julie Palmer
or Find your Nearest Office

Here at Real Business Rescue we take your privacy seriously and will only use your personal information to contact you with regards to your enquiry. We will not use your information for marketing purposes. See PRIVACY POLICY

Business Rescue Advice for Directors
Free Guide for Limited Company Directors
Business Rescue Advice for Directors
  • How to manage company cash flow problems
  • Advice on dealing with HMRC
  • Understanding rescue and closure options
  • And much more...
Free Guide Download
Dealing with your Insolvent Clients
Business Rescue Guide for Accountants
Dealing with your Insolvent Clients
  • Helping you advise insolvent clients
  • Spotting signs of client distress
  • Exploring business rescue options
  • And much more...
Free Guide Download
Our numbers speak for themselves
Number of UK Offices
Directors Helped
Licensed Insolvency Practitioners

This site uses cookies to monitor site performance and provide a more responsive and personalised experience. You must agree to our use of certain cookies. For more information on how we use and manage cookies please read our PRIVACY POLICY